Extreme weather events have been front-page news lately, especially with the U.S. experiencing record storms across much of the country and devastating droughts in the West. It’s not just the landscape the weather is wreaking havoc on — it’s sending an economic chill through the small business community, as well.
Small Business Majority’s latest opinion polling found extreme weather has been so devastating to small businesses that one in five poll respondents had to lay off workers after they were negatively impacted by an extreme weather event.
Nearly half the small business owners we polled reported having seen examples of extreme weather financially impacting their own business or that of someone they know. What’s more, a staggering nine in 10 small employers impacted by extreme weather report they’ve experienced a “significant” financial impact to their business in the aftermath of an event, with four in 10 small business owners reporting experiencing damages between $5,000 and $25,000.
Clearly, small businesses are especially at risk from the effects of climate change and the extreme weather events they cause. In fact, an estimated 25 percent of small to mid-sized businesses do not reopen following a major disaster, and up to 30 percent of all small businesses affected by Hurricane Sandy failed as a direct result of the storm.
Unfortunately, 2014 isn’t the first year extreme weather has caused problems. We experienced the most extreme years on record for destructive weather events during 2011 and 2012, and these storms caused more than $170 billion in damages, much of that to businesses. These extreme weather events — 25 in total — each caused billions of dollars in damage to homes, roads, schools and businesses. With the intense weather we’ve been experiencing, 2014 already looks like it might follow suit, and this means hard times ahead for small businesses.
Most small businesses have a single branch or location site, and this makes them more vulnerable to loss compared to larger businesses that have backup resources at other facilities or locations. As a result, small businesses are more heavily impacted by power outages, the absence of employees, supply chain interruptions, rising insurance costs and more.
In addition to suffering from financial and operational damages, a majority of small business owners in our recent polling said they’ve been forced to close their business or suspend operations due to an extreme weather event. 44 percent of Michigan and North Carolina small employers and 59 percent of Virginia small businesses were forced to close for up to a week, with some even closing for as long as 14 to 30 days.
With these events taking such a toll on small businesses, owners are starting to take note of the factors causing them. Nearly six in 10 small businesses agree climate change and the extreme weather events it creates are a problem that can disrupt the economy and hurt small employers, and they support clean energy policies aimed at lessening the impacts of climate change and that benefit their bottom lines.
Two-thirds of respondents support the Environmental Protection Agency’s standards to reduce mercury and other toxic emissions that get into the air from power plants, with more than half who support the EPA regulating carbon emissions from existing power plants that cause climate change.
Climate change and extreme weather have been touching an increasing number of small employers. When 1 in 5 owners saying they’ve had to lay off employees, it’s time to sit up and take notice.
Policymakers should embrace smart clean energy policies that can help mitigate climate change and prompt innovation — which would create opportunities for small businesses, boost the economy and help address some of the economic uncertainty we’re experiencing today — all while addressing this growing problem of extreme weather walloping small businesses.